A UK peer-to-peer (P2P) service has launched a self-invested personal pension (Sipp).
BondMason, the P2P investment provider that offers loans from across UK P2P platforms, now offers a Sipp service that aims to offer investors a flexible and tax-efficient way to save for retirement and returns from a range of approved P2P lenders.
The Sipp is available with a £5,000 minimum investment and no additional fees or tie-ins, as the company claims that an investor can typically exit in full within 48 hours.
BondMason chief executive Stephen Findlay called P2P lending an “increasingly attractive asset class” but said that Sipp administrators have been “rightly concerned” with the practical difficulties of monitoring clients’ investments and setting aside sufficient regulatory capital.
“We’ve launched this Sipp product because we recognise the need to make P2P lending as straight forward as possible, and because it fits with what our clients want and what Sipp administrators need.”
Mr Findlay added BondMason clients have achieved an average gross return of over 8 per cent a year from 2015 to date.
“For this Sipp offering, we’ve worked with pension administrators to create a product which benefits from our due diligence process and the selection of only the best loans from the best P2P platforms,” Mr Findlay said.
“We are meeting a demand in the marketplace which we expect to see grow and develop more over the coming months and years.”
Alistair Cunningham, financial planning director at Wingate Financial Planning, said that those looking for security should invest on deposit, and those looking for better returns and who can accept risk to their capital should consider a well-diversified portfolio.
“I would be concerned that peer to peer offers security than perceived and doesn't offer anything a widely spread portfolio cannot,” Mr Cunningham said.
Francis Klonowski, principle at Klonowski & Co, said that he would rather stick to recommending “tried and tested” investment solutions to clients, rather than going for whatever is the current investment fashion, like P2P.
“As with everything I see on P2P it is linked to the search for ‘better returns’. Better than what? And where is this growing demand from investors? Most of the people I meet want to see some kind of track record, the longer the better – not something that is still in its relative infancy,” Mr Klonowski said.
julia.faurschou@ft.com
